If you are looking to put some money aside for your child or grandchild, and do not want to take risks with the cash, children's bonus bonds are worth a look.

National Savings and Investments is today upping the rates it pays on these bonds by 0.4%, which means the latest issue pays 4.25% a year. Those on sale in December were paying only 3.65%.

Children's bonus bonds are five-year fixed rate products that can be bought by anyone over 16 for a child under 16. All returns are tax-free for both child and parent.

Meanwhile, new research indicates that, 16 months after child trust funds were launched by the government, the winners so far have been parents who chose funds where some of the money was invested in stocks and shares.

Sainsbury's Bank says it has found that the average return enjoyed by cash child trust fund accounts over the past 12 months was 5.05%. However, once introductory bonuses are removed, this falls to 4.89%, it says.

Sainsbury's Bank was trumpeting the fact that its stakeholder child trust fund, which has exposure to shares, has delivered a return of 19% after charges. "In choosing a child trust fund, parents need to remember that they are saving for the long term and, while carefully considering the investment risk they want to take, they should note that over the long term, equities have consistently outperformed cash," says a spokesman.

HM Revenue and Customs will be at the Baby Show at Birmingham NEC this weekend to field trust fund questions.